Congressional Update Re: Internet Gambling Funding

[Cubswin]

House leaders promise ‘clean bill’ on intelligence link
September 29, 2004
By Jonathan E. Kaplan

House Majority Leader Tom DeLay (R-Texas) said he is confident that the intelligence-reform bill will pass without any unrelated provisions despite pressure from lobbyists who view the measure as an enticing vehicle to help various industries.

“We’re trying to keep extraneous stuff out of it,” DeLay told reporters yesterday, while acknowledging that he does not fully control the legislative process in committees or conference.

Republican aides said the bill could be amended when it reaches the floor but no decisions had been made. Lawmakers and lobbyists have few remaining chances to insert pet projects to legislation. Prospects for completing work on the remaining appropriations bills, as well as the FSC/ETI corporate tax reform bill, the energy bill and the appropriations bills are bleak.

Nevertheless, Financial Services Committee Chairman Mike Oxley (R-Ohio) will introduce a manager’s amendment to his portion of the Sept. 11 bill, which includes measures related to combating terrorism but not specifically recommended by the Sept. 11 panel, such as Internet gambling and “financial netting." ...


Financial Services Committee Moves Legislation to Protect Military Personnel, Extend Terrorism Insurance, and Implement 9/11 Commission Recommendations link
Wednesday, September 29, 2004

The House Financial Services Committee today successfully moved three pieces of bipartisan legislation to: protect military personnel from unfair financial products and bad sales practices; extend the terrorism reinsurance program for two years; and implement the recommendations of the 9/11 Commission.

By a vote of 68-0, the Committee passed H.R. 5011, introduced by Rep. Max Burns (GA). The legislation would ban the sale of contractual mutual funds, an obscure product that disappeared from the civilian market more than two decades ago. Additionally, the bill would clarify that State insurance commissioners do have jurisdiction over military bases located within their borders, as well as military installations overseas. The legislation would require that military personnel be informed about life insurance available from the Federal government prior to the sale of any private insurance. The States are directed to develop standards to further protect members of the armed services. House Financial Services Committee Chairman Michael G. Oxley (OH) offered a manager’s amendment with the support of Rep. Rahm Emanuel (IL).

Rep. Jim Ryun (KS) offered an amendment to create a registry of barred insurance agents and financial advisors that would be made available nationally to all military installations and Federal and State financial regulators. Rep. Steve Israel (NY) offered a second-degree amendment to the Ryun amendment to require notification of military installations and regulators when there is a change in the registry. The Ryun amendment, as amended by Israel, passed by voice vote.

The full Committee also passed by voice vote H.R. 4634, the Terrorism Insurance Backstop Extension Act of 2004, offered by Rep. Pete Sessions (TX). The legislation would extend for two years the terrorism risk insurance program, which was created in 2002 to ensure the continued availability of commercial property and casualty insurance and reinsurance. A manager’s amendment was offered by Chairman Oxley and supported by Ranking Member Barney Frank (MA); Subcommittee Chairman Richard H. Baker (LA); Subcommittee Ranking Minority Member Paul Kanjorski (PA); Subcommittee Chairwoman Sue Kelly (NY); Rep. Michael E. Capuano (MA); and Rep. Steve Israel (NY). To protect taxpayers, the bill steadily increases the industry’s retention of risk and insurer deductibles in order to encourage the private insurance marketplace to develop long-term solutions for handling the risk of terrorism.

The Committee passed by voice vote its portion of the package of 9/11 legislation put forward by the House leadership to respond to the recommendations of the 9/11 Commission. While the Commission’s report cited with approval the anti-terror finance and anti-money laundering provisions in Title III of the USA Patriot Act, it went on to say that the terrorists are motivated and highly adaptive, and efforts to block their finances will need to continue to evolve and improve.

The legislation would make technical corrections to Title III and includes provisions that would: require the Treasury Department to develop a national money laundering strategy; grant the Securities and Exchange Commission emergency authority to respond to extraordinary market disturbances; boost the authority of the Financial Crimes Enforcement Network, the U.S. Governments financial intelligence unit; and equate the possession of counterfeiting tools with the intent to use them with the actual act of counterfeiting.

The so-called “netting” provision included in the bill would revise the banking and bankruptcy laws to provide for the orderly unwinding of certain financial contracts where one party to the transaction becomes insolvent, thereby minimizing the risk of market disruption. Federal Reserve Chairman Alan Greenspan has stated his belief that this measure is vital to the financial system’s ability to endure a future terrorist attack.

Also included in the legislation is a provision that passed the House last year that would bar Internet gambling sites access to the U.S. financial services system by preventing the use of credit cards, wire transfers, or any other bank instruments to fund illegal Internet gaming transactions. The Committee has previously heard testimony from the Federal Bureau of Investigation that Internet gambling is vulnerable for use in terrorist financing schemes.

To ensure that the government’s efforts against terrorist financing are matched throughout the world, the legislation would direct the Secretary of the Treasury to establish an international terrorist finance coordinating council.

[Cubswin]

[ QUOTE ]
Also included in the legislation is a provision that passed the House last year that would bar Internet gambling sites access to the U.S. financial services system by preventing the use of credit cards, wire transfers, or any other bank instruments to fund illegal Internet gaming transactions. The Committee has previously heard testimony from the Federal Bureau of Investigation that Internet gambling is vulnerable for use in terrorist financing schemes.


[/ QUOTE ]

The "provision that passed the House last year" was HR2143. This resolution defines "an electronic fund transfer or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of the other person" as a restricted transaction. Anyone want to ponder if neteller and firepay transactions would fall under this category.

cubs

[gabyyyyy]

A ban on internet gambling is still very far away.

This bill now has to be scheduled for a vote, which could be over a year away. Then the same version has to pass both the congress and house of reps. If any amendments are made, the process is delayed further.

I would not worry.

[moondogg]

At first reading, it looks like it just says that financial institutions must be held responsible for transmitting funds or extending credit to be used in "unlawful internet gambling", which is defined by any thing that is already illegal by state or federal law.

At the end, it says that this bill does not change the status of of internet gambling regulation. Just seems like they are clarifying that banks who knowingly help people break the law can be held liable. Doesn't seem to actually ban anything.

[Cubswin]

gabyyyy

you fail to realize that

1) this is not a bill to ban internet gambling... rather it is a bill to make it more difficult to fund gambling accounts

2) this bill is a rider of a bill that will have wide-spread support

3) this bill will progress much faster then previous attempts by congress to bar gambling sites access to the US financial networks because it is attached to much more significant legislation

cubs

[Cubswin]

[ QUOTE ]
At the end, it says that this bill does not change the status of of internet gambling regulation.

[/ QUOTE ]

correct, however... this should not be contrued to mean the bill wont affect access to funding mechanisms. at this point i am not worried about a ban on internet gambling... i am worried about my bank being able to do business with neteller and/or firepay... this is the real issue.

cubs

[uaw420rook]

I think you will see more options like partys phone card. Its hard to bust a bank for allowing a customer to buy a phone card.

[uaw420rook]

But I do worry about cashing checks and retrieving funds. That may become a problem

[mmcd]

While it may disrupt your bank's ability to do business with neteller and firepay specifically, I'm confident that the Internet gambling companies would come with some new type of "middleman" company that would fall outside the scope of the legislation. They're making too much money not to.

[mmcd]

Maybe (hopefully) they'll just add fedexing you cash as a cashout option.